In a Certain Economy, the Components of Planned Spending Are

question 89

Multiple Choice

In a certain economy, the components of planned spending are given by:  
C = 500 + 0.8(Y - T ) - 300r
Iᴾ = 200 - 400r
G = 200
NX = 10
T = 150
 
Given the information about the economy above, what would be the impact on induced expenditures of a one-percentage-point increase in the real interest rate?

• A)Induced expenditures would increase by 35 units.
• B)Induced expenditures would not change.
• C)Induced expenditures would decrease by 35 units.
• D)Induced expenditures would decrease by 7 units.

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Definitions:

Ideological Dilemma

Involves conflicting beliefs or values within an individual's own ideology or between different ideological perspectives, challenging one's coherent sense of identity or view on societal issues.

Classroom Dilemma

Refers to complex situations in an educational setting that may require a choice between options that are or seem equally unfavorable or mutually exclusive.

Mindfulness Conflict

A state of internal conflict that arises when trying to stay fully present and aware in the moment amidst distracting or distressing thoughts or emotions.

Context

The circumstances, environment, or background surrounding an event, situation, or statement, which affects its interpretation.